UBS Wealth Management Americas has unveiled a new advisor compensation plan that boosts bonuses for top performers and cuts pay for small accounts, a report by Reuters reveals.

In an interview with the news service, the bank said that advisors will be penalized or have their salaries slashed for offering client discounts and for weak performance. On the other hand, those who manage to get their clients into a range of products and services, or so-called "wrap accounts," will reap big bonuses. Higher pay incentives for advisors selling insurance and annuities will also be scrapped.

"We don't want to be in a position where we could be perceived as recommending one product or another based on payout rates," Jason Chandler, head of private wealth management at UBS, was quoted as having said.

Changes to the way advisors are paid are expected to result in a more client-centered approach, instead of the traditional incentive model where advisors market products based on their potential personal gain.

The new pay scheme, effective January 1, will reportedly see advisors receive an extra 0.5 to 2 per cent on top of fees and commissions earned for managing assets and creating financial plans. The same also applies to those selling annuities, mutual funds, insurance, alternatives, loans and mortgages. No bonus will be given for traditional sales of stocks and bonds for commissions. Bonuses under the new scheme will also more likely be awarded to over 90 per cent of advisors, Chandler noted, as opposed to the under 30 per cent who enjoyed them under the old system.